Defrost Finance

Defrost Finance (www.defrost.finance) is a decentralized protocol that allows you to utilise liquidity pool (LP) tokens and other pool tokens from various Avalanche and cross-chain protocols as collateral for generating H2O, a soft-pegged stablecoin native to the Avalanche ecosystem.

Defrost Finance helps users improve capital efficiency from assets locked in pools or vaults. Defrost Finance allows users to provide liquidity to gain additional yields from features such as farming, borrowing, staking, swap, and bridge support for convenience when trading.

Defrost Finance gives birth to H2O, which is backed by existing collateral with a soft peg to 1 USD. H2O can be minted by depositing collateral such as liquidity provider tokens from AMM (automated market maker) dexes (decentralised exchanges), lending, and other DeFi protocols.

The project envisions creating a stablecoin that is not USD-backed and at the same time releases more liquidity from Liquidity Provider tokens (LP tokens).

LP tokens collected from different chains and protocols can be used as collateral for minting H2O. The minting and burning are fully controlled by smart contracts. The overall mechanism is based on trustless and decentralized cross-chain functions/bridges.